TPK posts surprise revenue drop

CAUSE FOR CONCERN:The firm has pinned its hopes on an uptake of laptops with touch features to boost revenue, but demand has been looking lukewarm

By Lisa Wang / Staff reporter

TPK Holdings Co (宸鴻), which counts Apple Inc as its biggest touch panel client, yesterday posted a bigger-than-expected 22 percent quarterly decline in revenue for the last quarter as slumping demand for smartphones and tablets shrank last month’s revenue by 40 percent.

The quarterly contraction exceeded a quarterly decline ranging from 10 percent to 15 percent that the company forecast in April, given slowing orders from clients ahead of new product launches in the second half. That did not bode well for business prospects for the following quarter.

“Demand for smartphones and tablets slumped as consumers hold their purchasing ahead of new model launches in the second half,” TPK chief financial executive Freddie Liu (劉詩亮) said on the telephone.

Besides, customers slowed their pace of inventory buildup before the launch of computers equipped with Intel’s new Haswell chipset and an upgraded version of the Windows 8 operating system from Microsoft, Liu said.

TPK has pinned its hopes on an uptake of laptops with touch features to boost revenue, but Liu said demand has looked lukewarm recently, dragged down by overall weak PC sales.

“June will be the low point [in terms of revenue]. Growth will restart in July and August,” Liu said.

Revenue last month plunged to NT$8.62 billion, compared with NT$14.36 billion in May, according to a company statement. That marked the weakest monthly revenue since February 2011, when TPK booked NT$8.01 billion.

The touch panel maker’s revenue in the last quarter was NT$38.29 billion, down 22.5 percent from NT$49.43 billion in the previous quarter.

On an annual basis, last month’s figure was a decline of 22.1 percent from NT$11.08 billion.

TPK shares plunged 6.95 percent to NT$408.5 yesterday.

Elan Microelectronics Corp (義隆電子), which supplies touch-panel controller chips, yesterday said Sony has used its chips in its latest Xperia C series.

Elan said it has shipped the chips to Sony and it expects the new order to boost revenue in the second half of this year.